1 00:00:04,110 --> 00:00:07,500 Jennifer Duke: Welcome to the Fear and Greed Business Interview. I'm Jennifer Duke. 2 00:00:07,800 --> 00:00:11,670 Jennifer Duke: Agriculture plays a hugely significant role in Australia's economy. But 3 00:00:11,670 --> 00:00:14,190 Jennifer Duke: at the same time, it's also a major contributor to 4 00:00:14,190 --> 00:00:17,459 Jennifer Duke: our greenhouse gas emissions. There're some pretty exciting things happening 5 00:00:17,459 --> 00:00:21,150 Jennifer Duke: within the sector though, with operators embracing technology and new 6 00:00:21,150 --> 00:00:24,840 Jennifer Duke: ways of working to help decarbonize Australian agriculture. One of 7 00:00:24,840 --> 00:00:28,620 Jennifer Duke: those technologies is green hydrogen, which brings me to today's interview. 8 00:00:28,980 --> 00:00:32,668 Jennifer Duke: There's a joint project between green hydrogen company Hiringa Energy 9 00:00:32,848 --> 00:00:36,479 Jennifer Duke: and Australian Agricultural Enterprise, the Sundown Pastoral Company, and has 10 00:00:36,479 --> 00:00:39,990 Jennifer Duke: received almost $ 36 million in funding, and that's to help 11 00:00:39,990 --> 00:00:43,290 Jennifer Duke: construct and operate a major facility in Northern New South Wales. 12 00:00:43,710 --> 00:00:46,319 Jennifer Duke: David Statham is the Co-owner and Director of the Sundown 13 00:00:46,320 --> 00:00:48,479 Jennifer Duke: Pastoral Company. David, welcome to Fear and Greed. 14 00:00:49,260 --> 00:00:50,550 David Statham: Thank you, Jen. Thanks for your time. 15 00:00:50,550 --> 00:00:53,070 Jennifer Duke: We'll get to hydrogen in a little bit, but I 16 00:00:53,070 --> 00:00:54,989 Jennifer Duke: wanted to learn more about the company first. So this is 17 00:00:55,140 --> 00:00:57,660 Jennifer Duke: your family's business and it grew from a single farm. 18 00:00:57,660 --> 00:00:59,220 Jennifer Duke: Can you take me through the history of how this 19 00:00:59,220 --> 00:00:59,940 Jennifer Duke: all came about? 20 00:01:00,630 --> 00:01:02,639 David Statham: I'll try and keep it brief, but it's a long 21 00:01:02,639 --> 00:01:05,550 David Statham: history. My father started in agriculture. He started in the 22 00:01:05,550 --> 00:01:09,149 David Statham: steel business in Newcastle in the '50s, a company called 23 00:01:09,150 --> 00:01:14,520 David Statham: Ranbuild. A lot of his clients were rural farmers, obviously 24 00:01:14,910 --> 00:01:17,910 David Statham: richest people in Australia were the wool producers in the 25 00:01:17,910 --> 00:01:22,889 David Statham: 1950s and '60s where wool was a pound to pound. They were buying a lot of sheds. He met a 26 00:01:22,889 --> 00:01:25,018 David Statham: lot of people through that process. He bought his first 27 00:01:25,020 --> 00:01:28,769 David Statham: farm in 1964 in the New England Tablelands, a property called Sundown 28 00:01:28,770 --> 00:01:33,900 David Statham: Valley, and then Sundown Pasture Company grew from that point. We 29 00:01:33,900 --> 00:01:36,869 David Statham: had about four properties in the New England Tablelands and Keytah, 30 00:01:36,900 --> 00:01:39,059 David Statham: which is the main property we're on now, was purchased 31 00:01:39,059 --> 00:01:42,179 David Statham: in 1984, which is the year I left school. And 32 00:01:42,509 --> 00:01:46,139 David Statham: today Keytah is the main property and a property called 33 00:01:46,139 --> 00:01:49,170 David Statham: St. Ronans in Far North Queensland where we also have 34 00:01:49,170 --> 00:01:53,610 David Statham: converted a lot of country into farming and subsequently into irrigation. 35 00:01:54,540 --> 00:01:56,820 Jennifer Duke: That's pretty incredible. Were you always going to be involved 36 00:01:56,820 --> 00:01:57,451 Jennifer Duke: in the business? Was that always your plan? 37 00:01:57,451 --> 00:02:01,290 David Statham: Yes, I had an opportunity. I had no idea what I 38 00:02:01,290 --> 00:02:03,360 David Statham: wanted to do. I studied agriculture at school. I had 39 00:02:03,360 --> 00:02:05,969 David Statham: a lot of mates that were boarders, and I spent 40 00:02:05,969 --> 00:02:08,970 David Statham: a lot of my youth at Sundown Valley with my friends 41 00:02:08,970 --> 00:02:11,760 David Statham: and doing all sorts of sheep work and cattle work. 42 00:02:11,910 --> 00:02:17,460 David Statham: I was weaned off sheep really early. I didn't have 43 00:02:17,460 --> 00:02:19,440 David Statham: the passion for sheep that what I did for cattle, 44 00:02:19,860 --> 00:02:22,859 David Statham: but having that exposure to agriculture, growing up as a 45 00:02:22,859 --> 00:02:26,250 David Statham: young kid certainly had an influence on the opportunity that 46 00:02:26,340 --> 00:02:28,470 David Statham: I took when Dad through it my way the year 47 00:02:28,470 --> 00:02:29,070 David Statham: I left school. 48 00:02:29,790 --> 00:02:32,460 Jennifer Duke: So, when did your focus shift to sustainability? What was 49 00:02:32,460 --> 00:02:33,900 Jennifer Duke: the trigger that caused that? 50 00:02:34,440 --> 00:02:38,820 David Statham: What happened by default, Western Moree, we're in a low 51 00:02:38,820 --> 00:02:45,540 David Statham: rainfall area. Obviously, the change in practices, technology with machinery, 52 00:02:45,600 --> 00:02:48,600 David Statham: we were a hundred percent focused on water conservation and 53 00:02:48,600 --> 00:02:51,809 David Statham: all farming practices that led to retaining moisture in your 54 00:02:51,809 --> 00:02:54,330 David Statham: soil. And when you do that, you just so happen 55 00:02:54,330 --> 00:02:57,120 David Statham: to have something in your soil test called soil carbon. 56 00:02:57,630 --> 00:03:01,560 David Statham: And having the right people come down and understanding what 57 00:03:01,560 --> 00:03:05,669 David Statham: you had, and told us how by applying our farming 58 00:03:05,669 --> 00:03:10,380 David Statham: practices for moisture conservation, we're also building soil carbon. And 59 00:03:10,380 --> 00:03:13,258 David Statham: that sort of led into a project my wife and 60 00:03:13,258 --> 00:03:16,079 David Statham: I started mostly driven by her where she wanted to ... 61 00:03:16,379 --> 00:03:18,299 David Statham: She had a desire and a passion to wear the 62 00:03:18,299 --> 00:03:22,650 David Statham: clothes that she had in the field and with insurety 63 00:03:22,650 --> 00:03:27,059 David Statham: instead of greenwashing and that led us to FibreTrace. And that 64 00:03:27,059 --> 00:03:29,130 David Statham: led us to dealing with brands all around the world 65 00:03:29,130 --> 00:03:32,999 David Statham: and understanding what they required going forward. And they really 66 00:03:33,000 --> 00:03:36,119 David Statham: need to pull the carbon through the supply chain from 67 00:03:36,119 --> 00:03:39,930 David Statham: farmers to their balance sheets and in particular the European brands. 68 00:03:39,930 --> 00:03:43,440 David Statham: So that's been our journey. And we've marketed our cotton, 69 00:03:43,440 --> 00:03:46,620 David Statham: Good Earth Cotton. We're marking that cotton at our gin 70 00:03:46,620 --> 00:03:50,340 David Statham: with a company called FibreTrace, which is a rare earth 71 00:03:50,429 --> 00:03:54,000 David Statham: pigment, which we add to the cotton, and we've built 72 00:03:54,000 --> 00:03:57,210 David Statham: a blockchain around that. So you get full traceability from 73 00:03:57,210 --> 00:04:00,810 David Statham: farm to someone's shirt. Obviously, we did a recent promotion 74 00:04:00,810 --> 00:04:04,440 David Statham: with Country Road here in Australia, promoting Australian growing cotton 75 00:04:04,980 --> 00:04:07,740 David Statham: and sustainable. So I take you through that story and 76 00:04:07,740 --> 00:04:10,230 David Statham: I'll tell you that story for one reason. The reason 77 00:04:10,230 --> 00:04:13,860 David Statham: is that people just didn't want one story of Australian 78 00:04:13,860 --> 00:04:19,080 David Statham: cotton. They wanted the sustainability story, they wanted the carbon 79 00:04:19,080 --> 00:04:22,830 David Statham: story to tell to their consumers. And they obviously through 80 00:04:22,830 --> 00:04:26,909 David Statham: legislation what's happening in Europe, these big operators and the 81 00:04:26,910 --> 00:04:29,370 David Statham: biggest brands in the world are all based in Europe. 82 00:04:29,430 --> 00:04:34,170 David Statham: The legislation there by 2025, they need to have full 83 00:04:34,290 --> 00:04:37,200 David Statham: transparency of their supply chain and a carbon score on 84 00:04:37,200 --> 00:04:40,380 David Statham: each garment. And that's where it puts farmers in the 85 00:04:40,380 --> 00:04:43,049 David Statham: box seat because a lot of these brands are coming 86 00:04:43,049 --> 00:04:47,339 David Statham: to us directly and transacting with us directly because they 87 00:04:47,339 --> 00:04:48,599 David Statham: want the carbon from the farm. 88 00:04:49,200 --> 00:04:50,910 Jennifer Duke: Stay with me, David, we'll be back in a minute. 89 00:04:57,240 --> 00:04:59,730 Jennifer Duke: I'm talking to David Statham, the Co-owner and Director of 90 00:04:59,730 --> 00:05:04,139 Jennifer Duke: the Sundown Pastoral Company. So when these brands come knocking, 91 00:05:04,139 --> 00:05:06,479 Jennifer Duke: I mean that can be quite challenging for farmers shifting 92 00:05:06,480 --> 00:05:09,120 Jennifer Duke: towards that greener future. Can you run us through what 93 00:05:09,120 --> 00:05:11,610 Jennifer Duke: some of those difficulties are and how you kind of 94 00:05:11,610 --> 00:05:14,700 Jennifer Duke: overcome that thought process, I suppose, because this would've been 95 00:05:14,700 --> 00:05:16,859 Jennifer Duke: quite different to you when the opportunities popped up? 96 00:05:17,730 --> 00:05:20,520 David Statham: It did, they didn't come knocking on our door, we 97 00:05:20,520 --> 00:05:22,859 David Statham: were knocking on theirs to start with because we knew 98 00:05:22,859 --> 00:05:26,370 David Statham: we had a traceable product with FibreTrace. We knew we could 99 00:05:26,490 --> 00:05:31,110 David Statham: actually deliver our cotton from our farm to their shelves. 100 00:05:31,440 --> 00:05:34,500 David Statham: So that was the first thing. And then we knew 101 00:05:34,500 --> 00:05:38,669 David Statham: that the climate change debate around the world is getting 102 00:05:38,670 --> 00:05:42,569 David Statham: bigger and bigger and bigger and legislation in Europe is 103 00:05:42,570 --> 00:05:46,560 David Statham: such a driver for these companies. They either pay tax 104 00:05:46,620 --> 00:05:49,620 David Statham: on the garment or they can pay a farmer. So 105 00:05:50,070 --> 00:05:52,589 David Statham: one of the biggest things that I'd like to get 106 00:05:52,589 --> 00:05:55,170 David Statham: across is that we are in a very fortunate position 107 00:05:55,500 --> 00:05:58,619 David Statham: having come from the steel industry into agriculture because I 108 00:05:58,889 --> 00:06:02,460 David Statham: did work in the Ranbuild business for over 15 years. Data 109 00:06:02,460 --> 00:06:05,670 David Statham: records was critical. We had 20 years of soil tests, 110 00:06:05,910 --> 00:06:09,299 David Statham: every field, every second year in the same GL location 111 00:06:09,630 --> 00:06:11,400 David Statham: we had a record of and we had a record 112 00:06:11,400 --> 00:06:13,860 David Statham: of every field for the last 20 years of every 113 00:06:13,860 --> 00:06:19,079 David Statham: past chemical, fertilizer, the rates, the machinery passes on each 114 00:06:19,080 --> 00:06:23,099 David Statham: field. So that allowed us to tell a story probably 115 00:06:23,100 --> 00:06:27,389 David Statham: a lot earlier than most because we had the sequestration 116 00:06:27,389 --> 00:06:30,928 David Statham: story in the records because we're measuring soil carbon underneath the 117 00:06:30,928 --> 00:06:34,770 David Statham: soil and we could also measure our emissions through our fuel 118 00:06:34,770 --> 00:06:39,779 David Statham: purchases, our electricity, the fertilizer and chemical use. And that's 119 00:06:39,779 --> 00:06:42,539 David Statham: all calculated and it gives you a net result. You're 120 00:06:42,540 --> 00:06:46,169 David Statham: either sequestering carbon or you're emitting carbon as a farmer. 121 00:06:46,170 --> 00:06:49,200 David Statham: And to be able to measure it, record keeping is 122 00:06:49,200 --> 00:06:53,399 David Statham: probably the biggest thing that most people aren't in the 123 00:06:53,400 --> 00:06:56,130 David Statham: position of doing, but they had to tell their story 124 00:06:56,130 --> 00:06:58,529 David Statham: going forward, it's not just about the brands, it'll be 125 00:06:58,529 --> 00:07:01,469 David Statham: about, I think banks are going to be soon valuing 126 00:07:01,470 --> 00:07:06,150 David Statham: it. Land valuation companies will be soon making a point 127 00:07:06,150 --> 00:07:09,029 David Statham: of it. So I think it's going to come very 128 00:07:09,029 --> 00:07:12,749 David Statham: fast and it rewards those farmers that are doing positive 129 00:07:12,750 --> 00:07:16,560 David Statham: farming practices, looking after their soil, leaving better than what 130 00:07:16,560 --> 00:07:19,710 David Statham: they found it and they get a reward for it economically. That's the goal. 131 00:07:20,790 --> 00:07:22,979 Jennifer Duke: It is exciting to see farmers kind of on the 132 00:07:22,980 --> 00:07:25,380 Jennifer Duke: forefront of this. And one of the things, I think 133 00:07:25,380 --> 00:07:27,029 Jennifer Duke: I mentioned this in the intro, is that Good Earth 134 00:07:27,030 --> 00:07:30,540 Jennifer Duke: Green Hydrogen and Ammonia Project, which received some funding to 135 00:07:30,540 --> 00:07:32,520 Jennifer Duke: help with the construction of the facility. Can you explain 136 00:07:32,520 --> 00:07:34,380 Jennifer Duke: to us what that does and how that's going to 137 00:07:34,380 --> 00:07:35,040 Jennifer Duke: help this vision? 138 00:07:36,000 --> 00:07:38,160 David Statham: Well, sitting out on a journey to build my own 139 00:07:38,160 --> 00:07:41,340 David Statham: solar farm to run our own gin, understanding our emissions 140 00:07:42,120 --> 00:07:44,040 David Statham: over the last four or five years, obviously the ginning 141 00:07:44,040 --> 00:07:46,980 David Statham: process uses a lot of electricity. So as of today, 142 00:07:46,980 --> 00:07:50,220 David Statham: we've built a 9 megawatt solar farm and we've invested 143 00:07:50,220 --> 00:07:52,530 David Statham: heavily in batteries. So we're getting from seven o'clock in 144 00:07:52,530 --> 00:07:54,870 David Statham: the morning till 10 o'clock at night towards the end 145 00:07:54,870 --> 00:07:57,000 David Statham: of the season up until 11 o'clock at night through 146 00:07:57,000 --> 00:08:00,270 David Statham: the solar farm and the batteries, which is pretty extraordinary. So 147 00:08:00,270 --> 00:08:03,180 David Statham: it's over 66% of the power is coming from renewable energy. 148 00:08:03,599 --> 00:08:07,980 David Statham: During the process of building that solar farm, I was 149 00:08:07,980 --> 00:08:11,370 David Statham: introduced to Hiringa, which has got the skillset and we 150 00:08:11,370 --> 00:08:15,210 David Statham: discussed and talked about going into a project and having 151 00:08:15,510 --> 00:08:19,770 David Statham: to build our own hydrogen, anhydrous ammonia. After talking to them, 152 00:08:19,860 --> 00:08:23,850 David Statham: these technologies exist today mostly in the European countries again, 153 00:08:24,299 --> 00:08:27,300 David Statham: and it's a matter of bolting them together, putting them 154 00:08:27,300 --> 00:08:29,880 David Statham: in place. And we capitalized on the New South Wales 155 00:08:30,420 --> 00:08:34,410 David Statham: government's hydrogen fund to promote technologies like this and to 156 00:08:34,410 --> 00:08:38,130 David Statham: bring them forward. Obviously, our project is on a small 157 00:08:38,130 --> 00:08:41,458 David Statham: scale, that's why it needs funding. But they've done that 158 00:08:41,458 --> 00:08:44,429 David Statham: for a reason to try and kickstart the discussion. And 159 00:08:44,429 --> 00:08:47,580 David Statham: I think that it's more than feasible for these bigger 160 00:08:47,580 --> 00:08:50,040 David Statham: plants. Our project is only 10 ton a day, so 161 00:08:50,040 --> 00:08:53,880 David Statham: there are commercially viable plants running in other parts of 162 00:08:53,880 --> 00:08:55,920 David Statham: the world at 60 tons a day and they're only 163 00:08:55,920 --> 00:09:00,329 David Statham: three times the cost. So those projects could be rolled 164 00:09:00,330 --> 00:09:03,420 David Statham: out into quite a few other valleys to make a complete 165 00:09:03,420 --> 00:09:07,800 David Statham: green circular economy for farmers, supplying their own fuel and 166 00:09:07,800 --> 00:09:09,090 David Statham: fertilizer back to farmers. 167 00:09:10,080 --> 00:09:12,328 Jennifer Duke: The farming community's pretty tight. Do you see a lot 168 00:09:12,330 --> 00:09:14,458 Jennifer Duke: of appetite from other farmers for this type of tech? 169 00:09:14,460 --> 00:09:16,170 Jennifer Duke: Are they as innovative as you are? 170 00:09:17,730 --> 00:09:19,770 David Statham: I think there is. I think you've got enormous amount 171 00:09:19,770 --> 00:09:22,679 David Statham: of corporates in agriculture today. The corporates are going to 172 00:09:22,679 --> 00:09:25,440 David Statham: have the biggest ... Corporate companies are having more pressure on 173 00:09:25,440 --> 00:09:28,559 David Statham: their balance sheet in regards to carbon moving forward than 174 00:09:28,559 --> 00:09:31,980 David Statham: what private families will. So they've got the capital to 175 00:09:31,980 --> 00:09:34,529 David Statham: deploy. Some of them have got the land area to 176 00:09:34,529 --> 00:09:38,130 David Statham: deploy. So a lot of the ginning companies, it's perfect 177 00:09:38,130 --> 00:09:40,320 David Statham: for some of the bigger ginning companies in Australia, the 178 00:09:40,320 --> 00:09:43,348 David Statham: cotton ginning companies, they've already got the land, they've got 179 00:09:43,350 --> 00:09:46,559 David Statham: a customer, being the gin for the electricity and they've 180 00:09:46,559 --> 00:09:49,799 David Statham: also got customers that bring their cotton into them that 181 00:09:49,799 --> 00:09:51,389 David Statham: now require the fuel and the fertilizer. 182 00:09:52,109 --> 00:09:54,420 Jennifer Duke: David, that was absolutely fascinating. Thank you very much for 183 00:09:54,420 --> 00:09:55,380 Jennifer Duke: talking to Fear and Greed. 184 00:09:55,890 --> 00:09:56,370 David Statham: Thank you very much for your time. 185 00:09:57,630 --> 00:09:59,910 Jennifer Duke: And that was David Statham, the Co-owner and Director of 186 00:09:59,910 --> 00:10:03,270 Jennifer Duke: Sundown Pastoral Company. This is the Fear and Greed Daily Interview. 187 00:10:03,270 --> 00:10:05,639 Jennifer Duke: Join us every morning for the full episode of Fear 188 00:10:05,639 --> 00:10:09,299 Jennifer Duke: and Greed, Australia's best business podcast. I'm Jennifer Duke, economics 189 00:10:09,299 --> 00:10:11,940 Jennifer Duke: correspondent for Capital Brief and filling in for Sean Aylmer. 190 00:10:12,179 --> 00:10:12,718 Jennifer Duke: Have a great day.